Fed deals with balance sheet filled with souring debts

01/20/2009 | Wall Street Journal, The

The Federal Reserve's balance sheet includes piles of subprime-mortgage bonds, toxic commercial-real-estate debt and collateralized debt obligations that are worth little compared with their original value. The swollen balance sheet is the result of its rescue mission that included loans to major financial institutions, purchases of mortgage-related securities and other debt investors have shunned. As the rescue efforts continue, the Fed wades deeper into uncharted waters with the outcome more and more uncertain, according to this article.

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